By Theopolis Waters
CHICAGO, June 26 (Reuters) – Chicago Mercantile Exchange live cattle climbed on Wednesday with help from fund buying, traders and analysts said.
CME live cattle August led advances. Spread traders bought August and sold spot-June before it expires on June 28.
Spot-June settled up 0.125 cent per pound to 121.275 cents. Most-actively traded August closed 1.050 cents higher at 122.175 cents.
Speculative buyers bought futures believing the market has turned around after recently breaking out of the high end of its trading range.
“August is gaining on the 100-day moving average at 122.55 cents, which should confirm we’ve carved out a market bottom,” a trader said.
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Despite tepid wholesale beef demand, investors expect cash cattle to trade steady with $120 per hundredweight (cwt) last week following futures’ upswing on Wednesday.
There were no cash cattle bids or asking prices reported, said feedlot sources.
The U.S. Department of Agriculture’s Wednesday morning data showed the wholesale price of choice beef at $196.33 per cwt., which was $1.24 lower than on Tuesday. Select cuts were up 24 cents to $186.16.
CME feeder cattle drew support from higher live cattle futures.
And traders cited $1 to $4 per cwt. higher prices for cash feeder cattle in the most-watched Oklahoma City market.
August settled up 1.050 cents per lb. to 148.925 cents, and September was at 151.025 cents, or 0.950 cent higher.
HOGS SLIP WITH CASH OPTIMISM
Hog futures slipped on profit taking in anticipation of lower trending cash hog prices, traders and analysts said.
Packers will need fewer hogs with plants closed at least one day for the U.S. July 4 Independence holiday. And some processors have all the hogs they need as supplies build seasonally.
USDA data showed the average hog price on Wednesday morning in the most-watched Iowa/Minnesota market at $98.94 per cwt., $2.01 lower than on Tuesday.
From Monday to Wednesday, packers processed 1.207 million hogs, 20,000 more than last week and up 15,000 from a year earlier, according to USDA.
Wholesale pork demand is expected to stall after retailers top off inventories for July 4th grilling demand, but not before the cutout nears its all-time high.
Wednesday morning’s government mandatory wholesale pork price report, or cutout, calculated on a plant-delivered basis, was at $109.74 per cwt, up $1.64 from Tuesday.
The wholesale pork price on Wednesday was the highest of the year. And using USDA’s voluntary pork prices, which were replaced by the mandatory report, Wednesday’s price is near the $110.19 record set on August 8, 2011.
CME July hogs settled down 0.200 cent per lb to 99.950 cents and August closed at 97.650 cents, or down 0.050 cent.
